METALS-Nickel rises amid signs of nearby tight supply

Published Thu, Aug 29 2019 1:04 AM EDT

Mai Nguyen

(Adds quotes, updates prices)

SINGAPORE, Aug 29 (Reuters) - Base metals were mixed on Thursday, as the demand outlook was clouded by the U.S.-China trade dispute, while nickel rose amid signs of nearby tight supply on the London Metal Exchange (LME).

LME nickel, which has risen nearly 50% this year amid worries about supply disruption from top producer Indonesia, advanced 0.6% by 0448 GMT, while Shanghai nickel (ShFE) rose 1.8%.

The premiums of LME cash nickel over the three-month contract <MNI0-3> rose to a decade-high of $97 a tonne, indicating a shortage of nearby supply. One party holds 50% to 80% of available LME inventories, data showed. <0#LME-WHL>

"Barring the importance of Indonesia in global nickel supply chain, we are of the view that nickel's recent price action that defies the performance of all other base metals is overdone," said analyst Helen Lau of Argonaut Securities in a note.

FUNDAMENTALS

* NICKEL STOCKS: Nickel stocks in LME-approved warehouses have picked up slightly, and inventories in warehouses tracked by ShFE rose 2.6% to 29,771 tonnes as of Aug. 23 from a week earlier, the latest data showed. <MNISTX-TOTAL> <SNI-TOTAL-W>

* COPPER: LME three-month copper fell 0.1% to $5,682 a tonne, while the most-traded copper contract on ShFE was almost unchanged at 46,590 yuan ($6,568.63) a tonne.

* YUAN: China's central bank lowered its official yuan midpoint marginally to a fresh 11-1/2-year low on Thursday, but at a much firmer level than traders had expected, a sign read as an official attempt to steady the declines.

* TARIFFS: The Trump administration on Wednesday made official its extra 5% tariff on $300 billion in Chinese imports and set collection dates of Sept. 1 and Dec. 15, prompting hundreds of U.S. companies to warn of price hikes.

* LYNAS: Australian rare earths producer Lynas Corp posted a 50% jump in annual profit on Thursday on record production, and said it is still to decide on a site for a planned heavy rare earths processing plant.